China Mobile Q3 net beats estimates as subscribers increase

China Mobile Ltd, the world's biggest mobile operator by subscribers, posted a 1.3 percent gain in third-quarter net profit, beating estimates slightly, after luring new users to its network with cheap handsets and low call rates.

China Mobile, which has more than two times as many subscribers as the population of the United States, said average monthly net additional customers exceeded 5.4 million and that the company continued to lead the industry.

By offering handset deals and ultra-cheap voice plans, China Mobile has built up a vast rural subscriber base. But hefty handset subsidies and a lack of premium customers on its 3G data network, which does not support older models of Apple Inc's iPhones, have kept its net profit growth in the single digits in the past three years.

China Mobile earned 31.1 billion yuan ($4.9 billion) in July-to-September, according to calculations by Reuters based on nine-month profit data released on Monday. That compares with an average forecast of 30.5 billion yuan in a Reuters poll of nine analysts and a net profit of 30.7 billion yuan a year earlier.

Even with iPhones, the bottomline will still be pressured because of the increasing rebates in mobile phones, said Philip Mok, a Hong Kong-based analyst at Phillip Securities. (The key risk) will be slower-than-expected growth in its 3G customer base.

Earlier this year, China Mobile increased its full-year handset subsidies to 26 billion yuan from the originally planned 20 billion yuan to attract new users.

In the first six months, China Mobile spent the equivalent of 4.5 percent of its revenue on handset subsidies, company data showed.

That is less than the 8.3 percent for China Telecom Corp Ltd , which started selling iPhones earlier this year in the hopes of securing more data subscribers. China Unicom (Hong Kong) Ltd , which started marketing iPhones three years ago, spent the least as a percent of its revenues, at around 2.9 percent.

... contd.

ALSO READ

Govt aims to bring down CAD to 2.5% by 12th Plan-end, says Montek

Raghuram Rajan not in favour of sovereign bond to finance CAD

Airfares: Travel agents to keep shutters down on Tuesday

Companies expand background check on jobseekers